The main objective of this study is to examine the effect of market competition on the quality of hospital care in the state of California. There is a growing body of research suggesting that procompetitive policies in the health care market have resulted in lower hospital costs and prices, but there is a dearth of literature on the effects of these policies on quality of care. Given the rapid growth of managed care across the United States, it is not only important to assess the effects of these changes in the market on costs, prices, and expenditures, but ultimately these policies can only be fairly judged if there is knowledge regarding their effect on quality of care. Data for this proposal come from four sources, (1) the Office of Statewide Health Planning and Development (OSHPD) Discharge Abstract data set (8/26/90-12/31/95), (2) the OSHPD Annual Disclosure (cost report) data set (6/30/89-6/29/95), (3) the California Medical Review, Inc. (CMRI) Cooperative Cardiovascular Project (CCP) data set (4/1/94- 7/31/95, and (4) data from a proposed 7-item survey concerning the quality improvement practices of each study hospital (approximately 400). Both panel (i.e., OSHPD data sets) and cross-sectional data (i.e., CMRI CCP data, survey data) are utilized.. Specifically, this research addresses the following questions: (1) How does the quality of hospital care for acute myocardial infarction (AMI) vary with the level of market competition in California? and (2) At the hospital level, what is the relationship between process and outcomes of care for AMI? In this study, quality is measured using the OSHPD rick-adjusted AMI mortality rate per hospital per year and three CCP process of care indicators. Three types of analyses will be conducted: (1) multivariate regression models of hospital competition on the quality of care, where the risk- adjusted mortality rate and three CCP process of care indicators are the dependent variables, (2) correlation analyses of the risk-adjusted AMI mortality rate and the CCP indicators, and (3) t tests of the risk- adjusted mortality rates by hospital groupings (e.g., hospitals with and without continuous quality improvement programs for the management of AMI patients) using survey variables.